Capital Cash Flow Estimation Exercise Information to Solve Case 1) Assume Bloomi

Question

Capital Cash Flow Estimation Exercise Information to Solve Case

1) Assume Bloomington Indiana Mellencamp Health System, a not-for profit hospital, is evaluating a new MRI.

2) Cost Purchase price $500,000

Shipping and Install $80,000

3) Expected life 5 years

4) Salvage Value $250,000

5) Utilization 6000 scans per year

6) Net Revenue $150 per scan

7) Variable Cost $75 per scan

8) Fixed cost $150,000

9) Corporate cost of capital 12%

Calculate the operating cash flow

Year 1 Year 2 Year 3 Year 4 for each below:

Revenue Total

Fixed Cost

Variable Costs

Depreciation

BT operating income

Taxes

AT operating income

Depreciation

Net op. CF

Assume inflation 2%

Explanation / Answer

Scans per year 6000 6000 6000 6000 6000 Net revenue per scan 150.00 153.00 156.06 159.18 162.36 Total Revenue 900000 918000 936360 955087.2 974188.9 Variable cost per scan 450000 450000 450000 450000 450000 Fixed cost 150000 150000 150000 150000 150000 Depreciation 100000 100000 100000 100000 100000 Operating Income` 200000 218000 236360 255087.2 274188.9 Tax 70000 76300 82726 89280.52 95966.13 Net Income 130000 141700 153634 165806.7 178222.8 Depreciation 100000 100000 100000 100000 100000 Net Operating Cashflows 230000 241700 253634 265806.7 278222.8

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.